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Managerial Accounting Assignment Help

Question 2 – Week 3 (7 marks) 

  1. Total manufacturing cost for 150 Coffee table
 Job No. X10
Direct materials used                                  22,800 
Direct Labour used (600 *16)                                    9,600 
Applied Factory Overhead (30*400)                                   12,000 
Total manufacturing cost for Job No. X10                                  44,400 
  1. b) Calculate the cost per coffee table for Job No. X10?
Total manufacturing cost for Job No. X10 (A )                                  44,400 
Number of Coffee Table ( B )                                        150 
Cost Per Coffee Table (A/B)                                        296 
  1. c) List two uses of this unit cost information to the managers at Tik Tok Company.
  • Company can determine break even point  and level of profit.
  • Per unit cost helps in determining key cost drivers which increase overall cost of production. 

Question 2 – Week 5

  1. Calculations for activity rates for each of the overhead items
Activity Cost PoolsCost DriversEstimated Overhead (A )Expected Use of Cost Drivers ( B )Activity Rate (A/B)
PurchasingNumber of orders1,200,00040,00030Per Order
Machine setupsNumber of setups900,00018,00050Per Setup
MachiningMachine hours4,800,000120,00040Per Machine Hour
Quality ControlNumber of inspections700,00028,00025Per Inspection

Here is the calculations showing activity rates for overhead items. For purchasing activity the rate is $30 per order, For Machine setups and Machining $50 per set up and $40 per Machine hours respectively. Quality control costs $25 per inspection. 

  • Using the rates in (1) determine the unit cost for TRI-X.
Calculation of Overheads applied
Activity Cost Pools  Activity Rate (A )TRI-X Product ( B )Applied Overheads (A*B)
Purchasing30                                    17,000                                                    510,000 
Machine setups50                                      5,000                                                    250,000 
Machining40                                    75,000                                                3,000,000 
Quality Control25                                    11,000                                                    275,000 
Total Overheads applied (A )                                               4,035,000 
Number of Units manufactured ( B)                                                     26,000 
Overhead Unit Cost (A/B)                                                       155.19 
Direct Materials700.00
Direct Labour ($20/hour)120.00
Overheads applied                                  155.19 
Total Unit Cost of TRI-X                                  975.19 
  1. Calculate the Gross Profit  on the Product TRI-X
Selling Price Per Unit1600.00
Less Unit Cost                     975.19 
Gross Profit Per Unit                     624.81 

The selling price of TRI-X  in the market is $1600 per unit , as per the cost drivers and activity costs the total unit cost will be $975.19  which means  gross profit from the sale of goods  will be $624.8.

Question 3 – Week 6

  1. Cash receipt budget schedule , include total receipts per month
Cash Receipt Budget



Particulars July  August  September  Total 
Total Sales (A)                                140,000                                  210,000                                                    280,000                     630,000 
Immediately Collected ( A *15% ) =( B )                                  21,000                                     31,500                                                      42,000                        94,500 
Less Cash Discount (B* 4%)                                        840                                       1,260                                                        1,680                          3,780 
Cash Collected from Immediate  (B – C ) =(D )                                  20,160                                     30,240                                                      40,320                        90,720 
One month later (A *25%) = ( E )                                    35,000                                                      52,500                        87,500 
Two months later ( A *40%) = ( F )                                                     56,000                        56,000 
Total  Receipts (D +E +F)                                  20,160                                    65,240                                                   148,820                     234,220 

Working Note

                                                                                                        Sales Budget
Number of Units Sold                                    1,000                                       1,500                                                        2,000                          4,500 
Selling Price Per Unit                                        140                                          140                                                           140                             140 
Total Sales                                140,000                                  210,000                                                   280,000                     630,000 
  1. Prepare a material purchases budget schedule for each of the first three
                                                      Material Purchases  Budget
Particulars July  August  September  Total October
Budgeted Production                                    1,450                                       1,650                                                        2,120                          5,220              2,460 
Add Ending Inventory @20% of next month                                        330                                          424                                                           492                             492 
Total Requirements                                    1,780                                       2,074                                                        2,612                          6,466 
Less Beginning Inventory                                           –                                            330                                                           424                                –   
Number of Units to be Purchased                                    1,780                                       1,744                                                        2,188                          5,712 
Direct Material Cost Per Unit                                          60                                            60                                                              60                               60 
Total Direct Material purchased                                106,800                                  104,640                                                   131,280                     342,720 

Working Note

                                                                                                    Schedule of Payment of Material Budget  
Particulars July  August  September  Total 
Total Direct Material purchased                                106,800                                  104,640                                                    131,280                     342,720 
Payment made in the following month                                 106,800                                                    104,640                     211,440 
Total Payments made for Purchases                                           –                                    106,800                                                   104,640                     211,440 
  1. a cash budget for the month of July. Include the owners’ cash 
                                                                Cash Budget 
Particulars July  August  September  Total 
Opening Balance                                250,000                                  194,810                                                      52,650                     250,000 
Total Receipts                                  20,160                                     65,240                                                    148,820                     234,220 
Total Cash Available ( A )                                270,160                                  260,050                                                   201,470                     484,220 
Less Payments
Material                                           –                                    106,800                                                    104,640                     211,440 
Labour                                  14,500                                     16,500                                                      21,200                        52,200 
Variable Overheads                                  18,850                                     31,600                                                      39,110                        89,560 
Fixed Overheads                                  42,000                                     52,500                                                      52,500                     147,000 
Total Payments ( B )                                  75,350                                  207,400                                                   217,450                     500,200 
Ending Balance (A -B)                                194,810                                    52,650                                                    -15,980                      -15,980 

Question 2 – Week 8

  1. a) Using the general rule, determine the minimum transfer price.

When any manufacturing concerns are having factory outlets in more than one places  then they can transfer goods from one outlet to another  at transfer pricing. That transfer pricing  is the sum of  variable manufacturing costs and shipping cost and opportunity costs associated to the product. The calculation of transfer pricing are as follows: 

= $3.00 + $0.20 + $0.50 ($4.00-$3.50)

= $ 3.70

  1. b) Assume the Bottle Division has no excess capacity and can sell everything produced externally. Would the transfer price change?

When Bottle division consume  everything from the external sources then  transfer pricing would change  as goods generated internally and goods purchased from external channels have different costs  and vary  a lot.

  1. c) Assume the Bottle Division has no excess capacity and can sell everything produced externally. What is the maximum amount Perfume Division would be willing to pay for the bottles?

If Perfume division is going to purchase goods from bottle division which  sells products externally produced then Perfume division has to pay $4.00  per unit. As it is consuming goods which is produced externally not within same organisation.

  1. d) When is it more appropriate to use market-based transfer price rather than cost-based transfer price?

If there are two options cost based transfer price and market based transfer price, then market based transfer pricing is most simplest and elegant method. Company can earn highest possible profit rather than abnormal profit as per the regular  or mandate pricing schemes.

Question 3 – Week 10

Selling Price Per Unit2504001500 
(-)  Variable cost Per Unit80200800 
Contribution margin per unit170200700 
Sales Units120006000200020000
Contribution margin2040000120000014000004640000
a.Weighted average contribution Margin   232
b.BEP   21551.72
c.Margin of safety   24999

Working Note 

Contribution Margin = Total contribution margin of Sales mix/ Number of sales units

Break Even PointFixed cost/Contribution Margin per unit
Margin of SafetyActual Sales- Break Even / Actual sales
Projected Sales 25000
Total Annual Fixed Costs5,000,000

Question 3 – Week 11

Particulars 80000 unitsFor overseas selling Price (10000 units)90000 units
Direct Material 5757 
Direct Labour6060 
Variable Manufacturing Overhead1616 
Fixed Manufacturing Overhead3030 
Variable Selling and Administrative Costs10.219.2 
Fixed Selling and Administrative Cost2727 
Import and Other Duties Cost 4.2 
Total Unit Cost200.2213.4 
Total Cost16016000213400018150000
Selling Price240242.6 
Selling Unit800001000090000
Total Sales19200000242600021626000

Estimation of profit on the basis of 80000 units produced

Profit Percentage = 20

Profit For 10000 units = 42.68

  1. (b) Cost for selling damaged goods

There are 200 units of finished goods remaining as inventory with the company from last two months. The goods are now damaged due to environment and natural conditions, now if the company wants to sale them in market. Now, these goods are considered as damaged goods.  The feasible approach  for deciding  the selling price of the goods is the price offered by  market or cost of manufacturing  whichever is high.

  1. (c) “All future costs are relevant in decision making.” Do you agree? Explain. 

Future costs are pre decided costs for transactions in present time period. Yes, these costs are relevant for decision making. If any contract  between  parties are formed related to future transactions then it is good if in the contract future costs should involved because costs are changing with the pass of time and if future contracts are based on traditional pricing then no party will gain profit.  For recovery of cost and generating  profit , it is good  for making  contracts  on the basis of future cost.


Accounting Tools. (2020). Transfer Pricing. [online]. Available at: [Accessed on 06.10.2020].

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